2024-007 Reporting Prior Year Finding Number: N/A Year of Finding Origination: 2024 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Material Weakness and Modified Opinion Federal Agency: U.S. Department of the Treasury Program: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Award Number and Year: SLFRP3474, 2021 Pass-Through Agency: N/A – Federal Direct Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Title 2 U.S. Code of Federal Regulations § 200.510(b) states that the auditee must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with § 200.502, basis for determining federal awards expended. In addition, the U.S. Department of the Treasury requires recipients of funds to submit Project and Expenditure reports that include, by project, current period obligations, cumulative obligations, current period expenditures, and cumulative expenditures. The frequency of reporting is dependent on the size of the entity and amount of funding received. Condition: During 2024, McLeod County identified an additional $1,302,426 in COVID-19 – Coronavirus State and Local Fiscal Recovery Funds expenditures that were not included in the County’s original SEFA nor in the original population of expenditures provided for audit. In addition, expenditures documented in the County’s annual Project and Expenditure report through March 31, 2025, were understated by $1,515,400, and expenditures documented in the County’s annual Project and Expenditure report through March 31, 2024, were understated by $374,095. Questioned Costs: None. Context: The U.S. Department of the Treasury relies on accurate reporting of program costs to ensure grant funds are spent in accordance with program requirements. McLeod County is required to submit annual Project and Expenditure reports; the County submitted annual reports in both April 2024 and April 2025. Effect: Federal expenditures provided to the auditors were not fairly reported in the SEFA. In addition, the County did not accurately report expenditures on its Project and Expenditure reports as of March 31, 2025, and March 31, 2024. Cause: Due to human error, the County reported funds as obligated instead of expended because of additional projects that are ongoing. Recommendation: We recommend the County implement controls that ensure proper identification of federal expenditures in accordance with program requirements and that federal program reports are accurate. We also recommend the County submit revised Project and Expenditure reports as of March 31, 2025, and March 31, 2024. View of Responsible Official: Concur
Section III – Findings and questioned costs for Federal awards U.S. Department of Homeland Security, Federal Emergency Management Agency Passed through Missouri Department of Public Safety, State Emergency Management Agency Program Name: Disaster Grants – Public Assistance (Presidentially Declared Disasters) Assistance Listing #: 97.036 Finding: 2024 – 001 SIGNIFICANT DEFICIENCY Reporting Condition: During our original audit, the Cooperative initially failed to identify and properly report $878,271 of FEMA aid funding received from the State of Missouri. This error was identified subsequent to the issuance of the report and requires a re-issuance of the related audit reports. The internal control system did not prevent or detect this error to trigger the SEFA preparation process. Cause: The Cooperative's procedures for identifying and reporting federal expenditures were insufficient. The Cooperative finance personnel initially misunderstood the proper period for reporting FEMA disaster assistance expenditures. While the FEMA aid funding was approved by the State on December 20, 2024, with inspection by SEMA completed January 15, 2025, management initially concluded the expenditures should be reported in 2025 based on the cash receipt date. However, the expenditures should have been reported in 2024 when the eligible disaster recovery costs were actually incurred. This timing confusion, combined with the Cooperative's infrequent receipt of federal funding, resulted in the omission from the original 2024 SEFA. Effect: The initial error resulted in the audit report being issued without the required single audit report. While this error has been corrected, the control deficiency increases the risk that future federal awards could be incorrectly reported on the SEFA, potentially resulting in noncompliance with federal reporting requirements and incomplete or inaccurate identification of major programs subject to audit. Questioned Costs: $0 Criteria: 2 CFR 200.510(b) requires that the auditee prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Additionally, 2 CFR 200.303 requires that non-federal entities establish and maintain effective internal control over Federal awards that provides reasonable assurance that the non-federal entity is managing the awards in compliance with Federal statutes, regulations, and the terms and conditions of the related awards. Recommendation: We recommend the Cooperative implement written procedures for SEFA preparation that include: (1) obtaining and reviewing all award agreements to identify federal funding sources; (2) maintaining a master listing of all awards that identifies the funding source (federal/state/local) and applicable Assistance Listing Numbers; (3) implementing cutoff procedures to ensure federal expenditures are reported in the correct period based on when eligible costs are incurred, not when funds are received from federal systems; and (4) requiring independent review of the SEFA by someone knowledgeable about federal compliance requirements who verifies completeness against award documentation and proper period reporting. We note that the Cooperative's finance office maintains good communication practices with auditors regarding federal funding when they are aware of such awards; therefore, strengthening the internal identification and cutoff processes will enhance the Cooperative's ability to provide complete, accurate, and timely information to auditors about all federal funding sources. Views of responsible personnel and planned corrective actions: Management concurs with this finding. The Cooperative will implement the following corrective actions prior to December 31, 2025: • The CFO will document written procedures for SEFA preparation that specifically address proper period cutoff based on when costs are incurred versus when funds are received. • All current grant agreements will be reviewed to identify federal funding sources and ensure compliance with the single audit threshold. • The CFO will perform quarterly and annual reviews of federal expenditure reporting for completeness, accuracy, and proper period reporting. • Prior to year-end, the CFO will independently review all award documentation to the draft SEFA against all grant documentation to verify completeness and proper period reporting.
Finding 2024-002: Information on the Federal Program: Compliance Requirements: Other—Schedule of Expenditure of Federal Awards Preparation Type of Finding: Material Noncompliance and Material Weakness in Internal Control over Compliance. Criteria: 2 CFR 200.510 indicates that the auditee must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 200.502 Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. Generally, the activity pertains to events that require the non-Federal entity to comply with federal statutes, regulations, and the terms and conditions of federal awards, such as: expenditure/expense transactions associated with awards. In addition, 2 CFR Part 200.303 requires the program establish and maintain effective internal controls over federal awards that provide reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Condition: The Organization failed to prepare a complete and accurate SEFA for the year ended December 31, 2024. The SEFA is a required supplementary schedule that provides detailed information on all federal awards received and expended during the fiscal year, in accordance with 2 CFR 200.510. Cause: The noncompliance resulted from a deficiency in the Organization’s internal controls. The Organization does not have established policies and procedures to ensure all federal awards are properly identified, tracked, and included in the SEFA preparation process. Effect or Potential Effect: Due to the control deficiencies described above, if not for auditor assistance, inaccurate expenditures result in a high risk that material noncompliance with federal regulations could occur and not be detected and corrected in a timely manner; inaccurate reporting to federal agencies on the Organization’s federal expenditures; and persistent noncompliance can lead to potential loss of funding. Questioned costs: No questioned costs were identified as a result of this compliance finding. Context: The Organization mistakenly omitted to report expenditures of federal award expenditures on an accrual basis under the Sexual Risk Avoidance, ALN 93.060, and Title V Sexual Risk Avoidance Education Program (Discretionary Grants), ALN 93.787. Recommendation: We recommend that the Organization establish formal procedures to ensure SEFA preparation along with all federally funded contracts included in the SEFA as expenditures; implement a robust process to track all federal awards under government auditing standards, provide training on Uniform Grant Guidance, including SEFA preparation; perform management review to ensure the SEFA is accurate, complete, and prepared in a timely manner. Views of responsible officials and planned corrective actions: Management acknowledges the omission of the auditee’s prepared SEFA. Management is committed to properly preparing the SEFA, and to address this oversight, management will identify trainings for accounting personnel related to SEFA reporting and for those reviewing the schedule, to ensure its accuracy.
Assistance Listing, Federal Agency, and Program Name ALN 14.218, U.S. Department of Housing and Urban Development, Entitlement Grants Cluster (CDBG), Community Development Block Grants/Entitlement Grants and ALN 20.507, U.S. Department of Transportation, Federal Transit Cluster, Federal Transit Formula Grants Federal Award Identification Number and Year All grants under ALN Pass through Entity N/A Finding Type Material weakness Repeat Finding No Criteria Per 2 CFR Section 200.510(b), the auditee must also prepare a schedule of expenditures of federal awards for the period covered by the auditee's financial statements, which must include the total federal awards expended determined in accordance with Section 200.502. Condition The CDBG Cluster and Federal Transit Cluster expenditures on the schedule of expenditures of federal awards (SEFA) initially presented for audit were not complete and accurate. Questioned Costs None If Questioned Costs are Not Determinable, Description of Why Known Questioned Costs Were Undetermined or Otherwise Could not be Reported Not applicable Identification of How Questioned Costs Were Computed Not applicable Context The CDBG Cluster expenditures were overstated by $792,426 and the Federal Transit Cluster expenditures were overstated by $365,634. The final SEFA has been corrected. Cause and Effect Controls in place did not ensure the SEFA was complete and accurate and as a result, the SEFA needed to be adjusted for two federal clusters. This did not impact major program determination. Recommendation The City should implement a process to ensure the expenditures reported on the SEFA are complete and accurate. Views of Responsible Officials and Corrective Action Plan Due to turnover and the loss of a long term employee new processes were implemented to prepare reporting and documentation processes for the Federal Transit Cluster. Written Standard Operating Procedures have been generated and will be updated as necessary. Reporting and draw processes have been updated to include written signatures of approval for the documentation. The staff in transit and finance work closely together to ensure the completeness of records. City of Greeley will also be organizing a formalized grants team that will be dedicated to all grant activities including the SEFA and correcting the prior staffing insufficiencies.
Internal Control over Compliance and Compliance with Reporting (Preparation of the Schedule of Expenditures of Federal Awards (SEFA)) ALN: 10.904, Milk River Project ALN: 10.923, Stream Restoration and Bridge Replacement for St. Mary Siphon Failure ALN: 15.U01, Replacement of St. Mary and Hallls Coulee Siphons on St. Mary Canal CRITERIA: The Code of Federal Regulations (CFR) Section §200.510(b) states in part: "The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with CFR Section §200.502 Basis for determining Federal awards expended." The schedule must provide total Federal awards expended for each individual Federal program. CFR 200.302(b)(1) requires that the nonfederal entity must identify in its accounts and on the schedule of expenditures of federal awards all federal awards received and expended, as well as the federal programs under which they were received. Federal program and award identification must include, as applicable, the Assistance Listing program title and number, the federal award identification number and year, the name of the federal agency, and the name of the pass-through entity, if any. CONDITION: The ALN 10.923, Stream Restoration and Bridge Replacement for St. Mary Siphon Failure, was left off the prepared SEFA. Amounts reported for ALN 10.904 and ALN 15.U01 did not agree to the accounting records. CONTEXT: The SEFA was misstated as follows: • Understated for ALN 10.904 by $196,980; • Understated for ALN 10.923 by $105,977; and • Overstated for ALN 15.U01 by $1,978,224. The net effect was an overstatement of $1,675,267 for total federal expenditures. EFFECT: The SEFA provided was not complete and accurate. QUESTIONED COSTS: None CAUSE: The internal controls for the preparation of the SEFA and review of the SEFA were not present to ensure the SEFA was complete and accurate. RECOMMENDATION: We recommend the MRJBOC prepare written procedures on how to put together the SEFA and strengthen internal controls to ensure all federal awards are included on the SEFA. We also recommend that the SEFA be reviewed by someone other than the preparer for completeness and accuracy prior to providing to the auditor. MRJBOC RESPONSE: MRJBOC acknowledges the deficiencies identified in the preparation and review of the Schedule of Expenditures of Federal Awards (SEFA). During 2024, the organization experienced a significant increase in federal funding activity related to emergency response and infrastructure replacement projects. The rapid expansion of federal programs, addition of funds and reporting requirements exceeded existing internal documentation and review processes. To strengthen compliance controls and ensure SEFA accuracy in future reporting periods, MRJBOC will implement the following corrective actions: • Develop and formalize written SEFA preparation procedures, including grant identification, ALN verification, and reconciliation to general ledger balances. • Establish a dual-review process in which the SEFA is reviewed and approved by a party independent from the preparer prior to submission to auditors. • Maintain a centralized federal grant tracking log that includes award numbers, funding sources, drawdowns, and cumulative expenditures. These measures will improve internal control over federal reporting, enhance accuracy, and ensure compliance with federal audit requirements.
Criteria: 2 CFR Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Awards Requirements, Standards for Financial and Program Management, and §200.302 (b), Financial Management. The recipients financial management system must provide for identification, in its accounts, of all federal awards received and expended and the federal program under which they were received. Federal program and federal award identification must include, as applicable, the federal assistance listing title and number, federal award identification number, name of the federal agency, and name of the pass-through entity, if any. Additional Criteria: 2 CFR Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart F – Audit Requirements, §200.510, Financial Statements. Schedule of Expenditures of Federal Awards – The auditee also must prepare a schedule of expenditures of federal awards for the period covered by the auditee’s financial statements, which must include the total federal awards expended, as determined in accordance with §200.502, Basis for Determining Federal Awards Expended. At a minimum, the schedule must provide total federal awards expended for each individual federal program and the federal assistance listing number or other identifying number when the federal assistance listing information is not available. For a cluster of programs, also provide the total for the cluster. Condition: PCRI did not maintain a complete schedule of expenditures of federal awards. Cause: PCRI did not adequately track which government grants were federally-funded, resulting in an incomplete schedule of expenditures of federal awards. Effect: Failure to prepare an accurate and complete schedule of expenditures of federal awards results in noncompliance with 2 CFR Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Awards Requirements, Standards for Financial and Program Management, §200.302, Financial Management, and Subpart F – Audit Requirements, §200.510, Financial Statements. Recommendation: We recommend that PCRI document and implement policies and procedures to ensure the schedule of expenditures of federal awards is accurate and complete in accordance with 2 CFR Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Awards Requirements, Standards for Financial and Program Management, §200.302, Financial Management, and Subpart F – Audit Requirements, §200.510, Financial Statements, in order to obtain accurate calculations of major federal programs for the Single Audit and to ensure that PCRI is in compliance with all of the reporting requirements as to identify the source and application of funds for federally-funded activities.
2024-001 - SEFA REPORTING Federal Program Information: Federal Agency and Program Name - National Endowment for the Humanities Promotion of the Humanities Federal/State Partnership Grant Number: SO-289836-23 Federal Assistance Listing Number 45.129 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non- Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.510(b) states that “the auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502.” Condition: The Council’s internal controls are not adequate to ensure the Schedule of Expenditures of Federal Awards (SEFA) accurately reports Federal assistance. The Council’s fiscal year 2024 SEFA for the Promotion of the Humanities Federal/State Partnership program included expenditures from other fiscal years. Questioned Costs: Not applicable. Context: Total federal expenditures for the Promotion of the Humanities Federal/State Partnership program were $902,649 for the year ended October 31, 2024. Cause: The Council does not have adequate internal controls in place to ensure the accuracy of the SEFA. Effect: The Council is not reporting accurate financial information in its SEFA. Identification as a Repeat Finding: Prior Year Finding 2023-004 Recommendation: We recommend that the Council implement controls over financial reporting, including the SEFA, to ensure accuracy of financial data. Views of Responsible Officials: Management acknowledges the finding. See corrective action plan.
2024-001 - SEFA REPORTING Federal Program Information: Federal Agency and Program Name - National Endowment for the Humanities Promotion of the Humanities Federal/State Partnership Grant Number: SO-289836-23 Federal Assistance Listing Number 45.129 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non- Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.510(b) states that “the auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502.” Condition: The Council’s internal controls are not adequate to ensure the Schedule of Expenditures of Federal Awards (SEFA) accurately reports Federal assistance. The Council’s fiscal year 2024 SEFA for the Promotion of the Humanities Federal/State Partnership program included expenditures from other fiscal years. Questioned Costs: Not applicable. Context: Total federal expenditures for the Promotion of the Humanities Federal/State Partnership program were $902,649 for the year ended October 31, 2024. Cause: The Council does not have adequate internal controls in place to ensure the accuracy of the SEFA. Effect: The Council is not reporting accurate financial information in its SEFA. Identification as a Repeat Finding: Prior Year Finding 2023-004 Recommendation: We recommend that the Council implement controls over financial reporting, including the SEFA, to ensure accuracy of financial data. Views of Responsible Officials: Management acknowledges the finding. See corrective action plan.
Title and Assistance Listing Number of Federal Program - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - 2 CFR 200.510(b) requires organizations to prepare a schedule of expenditures of federal awards (SEFA), which includes total federal awards expended, as determined in accordance with 2 CFR 200.502. Condition - Expenditures incurred for the year ended September 30, 2024 were charged to various federal programs and were not reported on the SEFA for the year ended September 30, 2024. Context - The controls in place to ensure the completeness and accuracy of the SEFA were not operating as designed. As a result, $327,215 of expenditures of federal awards was not reported on the SEFA. These missing expenditures did not relate to major programs. Cause and Effect - The lack of a proper reconciliation of the SEFA to the financial records and lack of a review of the SEFA could result in an inaccurate SEFA and potentially impact major program determinations. Recommendation - We recommend the Board implement a process to ensure completion and timely review of a proper reconciliation of the SEFA to the financial statements prior to commencement of the audit. Views of Responsible Officials and Corrective Action Plan - Management will document a formal control to ensure proper reconciliation of the SEFA to the financial statements. The control will include the following: A report in substantially the same form as the annual SEFA will be developed at least quarterly and will include a reconciliation of grants receivable activity. Meetings will be held at least quarterly to review grant activity, including the aforementioned report, and assess impacts to the financial statements. These meetings will be conducted by treasury and accounting staff, and evidence of document review will be maintained. A centralized repository of information pertaining to federal grants activity will be maintained to ensure timely access to grant and expenditure data for relevant staff.
Title and Assistance Listing Number of Federal Program - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - 2 CFR 200.510(b) requires organizations to prepare a schedule of expenditures of federal awards (SEFA), which includes total federal awards expended, as determined in accordance with 2 CFR 200.502. Condition - Expenditures incurred for the year ended September 30, 2024 were charged to various federal programs and were not reported on the SEFA for the year ended September 30, 2024. Context - The controls in place to ensure the completeness and accuracy of the SEFA were not operating as designed. As a result, $327,215 of expenditures of federal awards was not reported on the SEFA. These missing expenditures did not relate to major programs. Cause and Effect - The lack of a proper reconciliation of the SEFA to the financial records and lack of a review of the SEFA could result in an inaccurate SEFA and potentially impact major program determinations. Recommendation - We recommend the Board implement a process to ensure completion and timely review of a proper reconciliation of the SEFA to the financial statements prior to commencement of the audit. Views of Responsible Officials and Corrective Action Plan - Management will document a formal control to ensure proper reconciliation of the SEFA to the financial statements. The control will include the following: A report in substantially the same form as the annual SEFA will be developed at least quarterly and will include a reconciliation of grants receivable activity. Meetings will be held at least quarterly to review grant activity, including the aforementioned report, and assess impacts to the financial statements. These meetings will be conducted by treasury and accounting staff, and evidence of document review will be maintained. A centralized repository of information pertaining to federal grants activity will be maintained to ensure timely access to grant and expenditure data for relevant staff.
Title and Assistance Listing Number of Federal Program - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - 2 CFR 200.510(b) requires organizations to prepare a schedule of expenditures of federal awards (SEFA), which includes total federal awards expended, as determined in accordance with 2 CFR 200.502. Condition - Expenditures incurred for the year ended September 30, 2024 were charged to various federal programs and were not reported on the SEFA for the year ended September 30, 2024. Context - The controls in place to ensure the completeness and accuracy of the SEFA were not operating as designed. As a result, $327,215 of expenditures of federal awards was not reported on the SEFA. These missing expenditures did not relate to major programs. Cause and Effect - The lack of a proper reconciliation of the SEFA to the financial records and lack of a review of the SEFA could result in an inaccurate SEFA and potentially impact major program determinations. Recommendation - We recommend the Board implement a process to ensure completion and timely review of a proper reconciliation of the SEFA to the financial statements prior to commencement of the audit. Views of Responsible Officials and Corrective Action Plan - Management will document a formal control to ensure proper reconciliation of the SEFA to the financial statements. The control will include the following: A report in substantially the same form as the annual SEFA will be developed at least quarterly and will include a reconciliation of grants receivable activity. Meetings will be held at least quarterly to review grant activity, including the aforementioned report, and assess impacts to the financial statements. These meetings will be conducted by treasury and accounting staff, and evidence of document review will be maintained. A centralized repository of information pertaining to federal grants activity will be maintained to ensure timely access to grant and expenditure data for relevant staff.
Title and Assistance Listing Number of Federal Program - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - 2 CFR 200.510(b) requires organizations to prepare a schedule of expenditures of federal awards (SEFA), which includes total federal awards expended, as determined in accordance with 2 CFR 200.502. Condition - Expenditures incurred for the year ended September 30, 2024 were charged to various federal programs and were not reported on the SEFA for the year ended September 30, 2024. Context - The controls in place to ensure the completeness and accuracy of the SEFA were not operating as designed. As a result, $327,215 of expenditures of federal awards was not reported on the SEFA. These missing expenditures did not relate to major programs. Cause and Effect - The lack of a proper reconciliation of the SEFA to the financial records and lack of a review of the SEFA could result in an inaccurate SEFA and potentially impact major program determinations. Recommendation - We recommend the Board implement a process to ensure completion and timely review of a proper reconciliation of the SEFA to the financial statements prior to commencement of the audit. Views of Responsible Officials and Corrective Action Plan - Management will document a formal control to ensure proper reconciliation of the SEFA to the financial statements. The control will include the following: A report in substantially the same form as the annual SEFA will be developed at least quarterly and will include a reconciliation of grants receivable activity. Meetings will be held at least quarterly to review grant activity, including the aforementioned report, and assess impacts to the financial statements. These meetings will be conducted by treasury and accounting staff, and evidence of document review will be maintained. A centralized repository of information pertaining to federal grants activity will be maintained to ensure timely access to grant and expenditure data for relevant staff.
Title and Assistance Listing Number of Federal Program - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - 2 CFR 200.510(b) requires organizations to prepare a schedule of expenditures of federal awards (SEFA), which includes total federal awards expended, as determined in accordance with 2 CFR 200.502. Condition - Expenditures incurred for the year ended September 30, 2024 were charged to various federal programs and were not reported on the SEFA for the year ended September 30, 2024. Context - The controls in place to ensure the completeness and accuracy of the SEFA were not operating as designed. As a result, $327,215 of expenditures of federal awards was not reported on the SEFA. These missing expenditures did not relate to major programs. Cause and Effect - The lack of a proper reconciliation of the SEFA to the financial records and lack of a review of the SEFA could result in an inaccurate SEFA and potentially impact major program determinations. Recommendation - We recommend the Board implement a process to ensure completion and timely review of a proper reconciliation of the SEFA to the financial statements prior to commencement of the audit. Views of Responsible Officials and Corrective Action Plan - Management will document a formal control to ensure proper reconciliation of the SEFA to the financial statements. The control will include the following: A report in substantially the same form as the annual SEFA will be developed at least quarterly and will include a reconciliation of grants receivable activity. Meetings will be held at least quarterly to review grant activity, including the aforementioned report, and assess impacts to the financial statements. These meetings will be conducted by treasury and accounting staff, and evidence of document review will be maintained. A centralized repository of information pertaining to federal grants activity will be maintained to ensure timely access to grant and expenditure data for relevant staff.
Title and Assistance Listing Number of Federal Program - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - 2 CFR 200.510(b) requires organizations to prepare a schedule of expenditures of federal awards (SEFA), which includes total federal awards expended, as determined in accordance with 2 CFR 200.502. Condition - Expenditures incurred for the year ended September 30, 2024 were charged to various federal programs and were not reported on the SEFA for the year ended September 30, 2024. Context - The controls in place to ensure the completeness and accuracy of the SEFA were not operating as designed. As a result, $327,215 of expenditures of federal awards was not reported on the SEFA. These missing expenditures did not relate to major programs. Cause and Effect - The lack of a proper reconciliation of the SEFA to the financial records and lack of a review of the SEFA could result in an inaccurate SEFA and potentially impact major program determinations. Recommendation - We recommend the Board implement a process to ensure completion and timely review of a proper reconciliation of the SEFA to the financial statements prior to commencement of the audit. Views of Responsible Officials and Corrective Action Plan - Management will document a formal control to ensure proper reconciliation of the SEFA to the financial statements. The control will include the following: A report in substantially the same form as the annual SEFA will be developed at least quarterly and will include a reconciliation of grants receivable activity. Meetings will be held at least quarterly to review grant activity, including the aforementioned report, and assess impacts to the financial statements. These meetings will be conducted by treasury and accounting staff, and evidence of document review will be maintained. A centralized repository of information pertaining to federal grants activity will be maintained to ensure timely access to grant and expenditure data for relevant staff.
Title and Assistance Listing Number of Federal Program - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - 2 CFR 200.510(b) requires organizations to prepare a schedule of expenditures of federal awards (SEFA), which includes total federal awards expended, as determined in accordance with 2 CFR 200.502. Condition - Expenditures incurred for the year ended September 30, 2024 were charged to various federal programs and were not reported on the SEFA for the year ended September 30, 2024. Context - The controls in place to ensure the completeness and accuracy of the SEFA were not operating as designed. As a result, $327,215 of expenditures of federal awards was not reported on the SEFA. These missing expenditures did not relate to major programs. Cause and Effect - The lack of a proper reconciliation of the SEFA to the financial records and lack of a review of the SEFA could result in an inaccurate SEFA and potentially impact major program determinations. Recommendation - We recommend the Board implement a process to ensure completion and timely review of a proper reconciliation of the SEFA to the financial statements prior to commencement of the audit. Views of Responsible Officials and Corrective Action Plan - Management will document a formal control to ensure proper reconciliation of the SEFA to the financial statements. The control will include the following: A report in substantially the same form as the annual SEFA will be developed at least quarterly and will include a reconciliation of grants receivable activity. Meetings will be held at least quarterly to review grant activity, including the aforementioned report, and assess impacts to the financial statements. These meetings will be conducted by treasury and accounting staff, and evidence of document review will be maintained. A centralized repository of information pertaining to federal grants activity will be maintained to ensure timely access to grant and expenditure data for relevant staff.
Title and Assistance Listing Number of Federal Program - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - 2 CFR 200.510(b) requires organizations to prepare a schedule of expenditures of federal awards (SEFA), which includes total federal awards expended, as determined in accordance with 2 CFR 200.502. Condition - Expenditures incurred for the year ended September 30, 2024 were charged to various federal programs and were not reported on the SEFA for the year ended September 30, 2024. Context - The controls in place to ensure the completeness and accuracy of the SEFA were not operating as designed. As a result, $327,215 of expenditures of federal awards was not reported on the SEFA. These missing expenditures did not relate to major programs. Cause and Effect - The lack of a proper reconciliation of the SEFA to the financial records and lack of a review of the SEFA could result in an inaccurate SEFA and potentially impact major program determinations. Recommendation - We recommend the Board implement a process to ensure completion and timely review of a proper reconciliation of the SEFA to the financial statements prior to commencement of the audit. Views of Responsible Officials and Corrective Action Plan - Management will document a formal control to ensure proper reconciliation of the SEFA to the financial statements. The control will include the following: A report in substantially the same form as the annual SEFA will be developed at least quarterly and will include a reconciliation of grants receivable activity. Meetings will be held at least quarterly to review grant activity, including the aforementioned report, and assess impacts to the financial statements. These meetings will be conducted by treasury and accounting staff, and evidence of document review will be maintained. A centralized repository of information pertaining to federal grants activity will be maintained to ensure timely access to grant and expenditure data for relevant staff.
Title and Assistance Listing Number of Federal Program - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - 2 CFR 200.510(b) requires organizations to prepare a schedule of expenditures of federal awards (SEFA), which includes total federal awards expended, as determined in accordance with 2 CFR 200.502. Condition - Expenditures incurred for the year ended September 30, 2024 were charged to various federal programs and were not reported on the SEFA for the year ended September 30, 2024. Context - The controls in place to ensure the completeness and accuracy of the SEFA were not operating as designed. As a result, $327,215 of expenditures of federal awards was not reported on the SEFA. These missing expenditures did not relate to major programs. Cause and Effect - The lack of a proper reconciliation of the SEFA to the financial records and lack of a review of the SEFA could result in an inaccurate SEFA and potentially impact major program determinations. Recommendation - We recommend the Board implement a process to ensure completion and timely review of a proper reconciliation of the SEFA to the financial statements prior to commencement of the audit. Views of Responsible Officials and Corrective Action Plan - Management will document a formal control to ensure proper reconciliation of the SEFA to the financial statements. The control will include the following: A report in substantially the same form as the annual SEFA will be developed at least quarterly and will include a reconciliation of grants receivable activity. Meetings will be held at least quarterly to review grant activity, including the aforementioned report, and assess impacts to the financial statements. These meetings will be conducted by treasury and accounting staff, and evidence of document review will be maintained. A centralized repository of information pertaining to federal grants activity will be maintained to ensure timely access to grant and expenditure data for relevant staff.
Title and Assistance Listing Number of Federal Program - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - 2 CFR 200.510(b) requires organizations to prepare a schedule of expenditures of federal awards (SEFA), which includes total federal awards expended, as determined in accordance with 2 CFR 200.502. Condition - Expenditures incurred for the year ended September 30, 2024 were charged to various federal programs and were not reported on the SEFA for the year ended September 30, 2024. Context - The controls in place to ensure the completeness and accuracy of the SEFA were not operating as designed. As a result, $327,215 of expenditures of federal awards was not reported on the SEFA. These missing expenditures did not relate to major programs. Cause and Effect - The lack of a proper reconciliation of the SEFA to the financial records and lack of a review of the SEFA could result in an inaccurate SEFA and potentially impact major program determinations. Recommendation - We recommend the Board implement a process to ensure completion and timely review of a proper reconciliation of the SEFA to the financial statements prior to commencement of the audit. Views of Responsible Officials and Corrective Action Plan - Management will document a formal control to ensure proper reconciliation of the SEFA to the financial statements. The control will include the following: A report in substantially the same form as the annual SEFA will be developed at least quarterly and will include a reconciliation of grants receivable activity. Meetings will be held at least quarterly to review grant activity, including the aforementioned report, and assess impacts to the financial statements. These meetings will be conducted by treasury and accounting staff, and evidence of document review will be maintained. A centralized repository of information pertaining to federal grants activity will be maintained to ensure timely access to grant and expenditure data for relevant staff.
Title and Assistance Listing Number of Federal Program - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - 2 CFR 200.510(b) requires organizations to prepare a schedule of expenditures of federal awards (SEFA), which includes total federal awards expended, as determined in accordance with 2 CFR 200.502. Condition - Expenditures incurred for the year ended September 30, 2024 were charged to various federal programs and were not reported on the SEFA for the year ended September 30, 2024. Context - The controls in place to ensure the completeness and accuracy of the SEFA were not operating as designed. As a result, $327,215 of expenditures of federal awards was not reported on the SEFA. These missing expenditures did not relate to major programs. Cause and Effect - The lack of a proper reconciliation of the SEFA to the financial records and lack of a review of the SEFA could result in an inaccurate SEFA and potentially impact major program determinations. Recommendation - We recommend the Board implement a process to ensure completion and timely review of a proper reconciliation of the SEFA to the financial statements prior to commencement of the audit. Views of Responsible Officials and Corrective Action Plan - Management will document a formal control to ensure proper reconciliation of the SEFA to the financial statements. The control will include the following: A report in substantially the same form as the annual SEFA will be developed at least quarterly and will include a reconciliation of grants receivable activity. Meetings will be held at least quarterly to review grant activity, including the aforementioned report, and assess impacts to the financial statements. These meetings will be conducted by treasury and accounting staff, and evidence of document review will be maintained. A centralized repository of information pertaining to federal grants activity will be maintained to ensure timely access to grant and expenditure data for relevant staff.
Title and Assistance Listing Number of Federal Program - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - 2 CFR 200.510(b) requires organizations to prepare a schedule of expenditures of federal awards (SEFA), which includes total federal awards expended, as determined in accordance with 2 CFR 200.502. Condition - Expenditures incurred for the year ended September 30, 2024 were charged to various federal programs and were not reported on the SEFA for the year ended September 30, 2024. Context - The controls in place to ensure the completeness and accuracy of the SEFA were not operating as designed. As a result, $327,215 of expenditures of federal awards was not reported on the SEFA. These missing expenditures did not relate to major programs. Cause and Effect - The lack of a proper reconciliation of the SEFA to the financial records and lack of a review of the SEFA could result in an inaccurate SEFA and potentially impact major program determinations. Recommendation - We recommend the Board implement a process to ensure completion and timely review of a proper reconciliation of the SEFA to the financial statements prior to commencement of the audit. Views of Responsible Officials and Corrective Action Plan - Management will document a formal control to ensure proper reconciliation of the SEFA to the financial statements. The control will include the following: A report in substantially the same form as the annual SEFA will be developed at least quarterly and will include a reconciliation of grants receivable activity. Meetings will be held at least quarterly to review grant activity, including the aforementioned report, and assess impacts to the financial statements. These meetings will be conducted by treasury and accounting staff, and evidence of document review will be maintained. A centralized repository of information pertaining to federal grants activity will be maintained to ensure timely access to grant and expenditure data for relevant staff.
Title and Assistance Listing Number of Federal Program - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - 2 CFR 200.510(b) requires organizations to prepare a schedule of expenditures of federal awards (SEFA), which includes total federal awards expended, as determined in accordance with 2 CFR 200.502. Condition - Expenditures incurred for the year ended September 30, 2024 were charged to various federal programs and were not reported on the SEFA for the year ended September 30, 2024. Context - The controls in place to ensure the completeness and accuracy of the SEFA were not operating as designed. As a result, $327,215 of expenditures of federal awards was not reported on the SEFA. These missing expenditures did not relate to major programs. Cause and Effect - The lack of a proper reconciliation of the SEFA to the financial records and lack of a review of the SEFA could result in an inaccurate SEFA and potentially impact major program determinations. Recommendation - We recommend the Board implement a process to ensure completion and timely review of a proper reconciliation of the SEFA to the financial statements prior to commencement of the audit. Views of Responsible Officials and Corrective Action Plan - Management will document a formal control to ensure proper reconciliation of the SEFA to the financial statements. The control will include the following: A report in substantially the same form as the annual SEFA will be developed at least quarterly and will include a reconciliation of grants receivable activity. Meetings will be held at least quarterly to review grant activity, including the aforementioned report, and assess impacts to the financial statements. These meetings will be conducted by treasury and accounting staff, and evidence of document review will be maintained. A centralized repository of information pertaining to federal grants activity will be maintained to ensure timely access to grant and expenditure data for relevant staff.
Title and Assistance Listing Number of Federal Program - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - 2 CFR 200.510(b) requires organizations to prepare a schedule of expenditures of federal awards (SEFA), which includes total federal awards expended, as determined in accordance with 2 CFR 200.502. Condition - Expenditures incurred for the year ended September 30, 2024 were charged to various federal programs and were not reported on the SEFA for the year ended September 30, 2024. Context - The controls in place to ensure the completeness and accuracy of the SEFA were not operating as designed. As a result, $327,215 of expenditures of federal awards was not reported on the SEFA. These missing expenditures did not relate to major programs. Cause and Effect - The lack of a proper reconciliation of the SEFA to the financial records and lack of a review of the SEFA could result in an inaccurate SEFA and potentially impact major program determinations. Recommendation - We recommend the Board implement a process to ensure completion and timely review of a proper reconciliation of the SEFA to the financial statements prior to commencement of the audit. Views of Responsible Officials and Corrective Action Plan - Management will document a formal control to ensure proper reconciliation of the SEFA to the financial statements. The control will include the following: A report in substantially the same form as the annual SEFA will be developed at least quarterly and will include a reconciliation of grants receivable activity. Meetings will be held at least quarterly to review grant activity, including the aforementioned report, and assess impacts to the financial statements. These meetings will be conducted by treasury and accounting staff, and evidence of document review will be maintained. A centralized repository of information pertaining to federal grants activity will be maintained to ensure timely access to grant and expenditure data for relevant staff.
Title and Assistance Listing Number of Federal Program - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - 2 CFR 200.510(b) requires organizations to prepare a schedule of expenditures of federal awards (SEFA), which includes total federal awards expended, as determined in accordance with 2 CFR 200.502. Condition - Expenditures incurred for the year ended September 30, 2024 were charged to various federal programs and were not reported on the SEFA for the year ended September 30, 2024. Context - The controls in place to ensure the completeness and accuracy of the SEFA were not operating as designed. As a result, $327,215 of expenditures of federal awards was not reported on the SEFA. These missing expenditures did not relate to major programs. Cause and Effect - The lack of a proper reconciliation of the SEFA to the financial records and lack of a review of the SEFA could result in an inaccurate SEFA and potentially impact major program determinations. Recommendation - We recommend the Board implement a process to ensure completion and timely review of a proper reconciliation of the SEFA to the financial statements prior to commencement of the audit. Views of Responsible Officials and Corrective Action Plan - Management will document a formal control to ensure proper reconciliation of the SEFA to the financial statements. The control will include the following: A report in substantially the same form as the annual SEFA will be developed at least quarterly and will include a reconciliation of grants receivable activity. Meetings will be held at least quarterly to review grant activity, including the aforementioned report, and assess impacts to the financial statements. These meetings will be conducted by treasury and accounting staff, and evidence of document review will be maintained. A centralized repository of information pertaining to federal grants activity will be maintained to ensure timely access to grant and expenditure data for relevant staff.
Title and Assistance Listing Number of Federal Program - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - 2 CFR 200.510(b) requires organizations to prepare a schedule of expenditures of federal awards (SEFA), which includes total federal awards expended, as determined in accordance with 2 CFR 200.502. Condition - Expenditures incurred for the year ended September 30, 2024 were charged to various federal programs and were not reported on the SEFA for the year ended September 30, 2024. Context - The controls in place to ensure the completeness and accuracy of the SEFA were not operating as designed. As a result, $327,215 of expenditures of federal awards was not reported on the SEFA. These missing expenditures did not relate to major programs. Cause and Effect - The lack of a proper reconciliation of the SEFA to the financial records and lack of a review of the SEFA could result in an inaccurate SEFA and potentially impact major program determinations. Recommendation - We recommend the Board implement a process to ensure completion and timely review of a proper reconciliation of the SEFA to the financial statements prior to commencement of the audit. Views of Responsible Officials and Corrective Action Plan - Management will document a formal control to ensure proper reconciliation of the SEFA to the financial statements. The control will include the following: A report in substantially the same form as the annual SEFA will be developed at least quarterly and will include a reconciliation of grants receivable activity. Meetings will be held at least quarterly to review grant activity, including the aforementioned report, and assess impacts to the financial statements. These meetings will be conducted by treasury and accounting staff, and evidence of document review will be maintained. A centralized repository of information pertaining to federal grants activity will be maintained to ensure timely access to grant and expenditure data for relevant staff.
Title and Assistance Listing Number of Federal Program - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - 2 CFR 200.510(b) requires organizations to prepare a schedule of expenditures of federal awards (SEFA), which includes total federal awards expended, as determined in accordance with 2 CFR 200.502. Condition - Expenditures incurred for the year ended September 30, 2024 were charged to various federal programs and were not reported on the SEFA for the year ended September 30, 2024. Context - The controls in place to ensure the completeness and accuracy of the SEFA were not operating as designed. As a result, $327,215 of expenditures of federal awards was not reported on the SEFA. These missing expenditures did not relate to major programs. Cause and Effect - The lack of a proper reconciliation of the SEFA to the financial records and lack of a review of the SEFA could result in an inaccurate SEFA and potentially impact major program determinations. Recommendation - We recommend the Board implement a process to ensure completion and timely review of a proper reconciliation of the SEFA to the financial statements prior to commencement of the audit. Views of Responsible Officials and Corrective Action Plan - Management will document a formal control to ensure proper reconciliation of the SEFA to the financial statements. The control will include the following: A report in substantially the same form as the annual SEFA will be developed at least quarterly and will include a reconciliation of grants receivable activity. Meetings will be held at least quarterly to review grant activity, including the aforementioned report, and assess impacts to the financial statements. These meetings will be conducted by treasury and accounting staff, and evidence of document review will be maintained. A centralized repository of information pertaining to federal grants activity will be maintained to ensure timely access to grant and expenditure data for relevant staff.
Title and Assistance Listing Number of Federal Program - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - 2 CFR 200.510(b) requires organizations to prepare a schedule of expenditures of federal awards (SEFA), which includes total federal awards expended, as determined in accordance with 2 CFR 200.502. Condition - Expenditures incurred for the year ended September 30, 2024 were charged to various federal programs and were not reported on the SEFA for the year ended September 30, 2024. Context - The controls in place to ensure the completeness and accuracy of the SEFA were not operating as designed. As a result, $327,215 of expenditures of federal awards was not reported on the SEFA. These missing expenditures did not relate to major programs. Cause and Effect - The lack of a proper reconciliation of the SEFA to the financial records and lack of a review of the SEFA could result in an inaccurate SEFA and potentially impact major program determinations. Recommendation - We recommend the Board implement a process to ensure completion and timely review of a proper reconciliation of the SEFA to the financial statements prior to commencement of the audit. Views of Responsible Officials and Corrective Action Plan - Management will document a formal control to ensure proper reconciliation of the SEFA to the financial statements. The control will include the following: A report in substantially the same form as the annual SEFA will be developed at least quarterly and will include a reconciliation of grants receivable activity. Meetings will be held at least quarterly to review grant activity, including the aforementioned report, and assess impacts to the financial statements. These meetings will be conducted by treasury and accounting staff, and evidence of document review will be maintained. A centralized repository of information pertaining to federal grants activity will be maintained to ensure timely access to grant and expenditure data for relevant staff.
Title and Assistance Listing Number of Federal Program - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - 2 CFR 200.510(b) requires organizations to prepare a schedule of expenditures of federal awards (SEFA), which includes total federal awards expended, as determined in accordance with 2 CFR 200.502. Condition - Expenditures incurred for the year ended September 30, 2024 were charged to various federal programs and were not reported on the SEFA for the year ended September 30, 2024. Context - The controls in place to ensure the completeness and accuracy of the SEFA were not operating as designed. As a result, $327,215 of expenditures of federal awards was not reported on the SEFA. These missing expenditures did not relate to major programs. Cause and Effect - The lack of a proper reconciliation of the SEFA to the financial records and lack of a review of the SEFA could result in an inaccurate SEFA and potentially impact major program determinations. Recommendation - We recommend the Board implement a process to ensure completion and timely review of a proper reconciliation of the SEFA to the financial statements prior to commencement of the audit. Views of Responsible Officials and Corrective Action Plan - Management will document a formal control to ensure proper reconciliation of the SEFA to the financial statements. The control will include the following: A report in substantially the same form as the annual SEFA will be developed at least quarterly and will include a reconciliation of grants receivable activity. Meetings will be held at least quarterly to review grant activity, including the aforementioned report, and assess impacts to the financial statements. These meetings will be conducted by treasury and accounting staff, and evidence of document review will be maintained. A centralized repository of information pertaining to federal grants activity will be maintained to ensure timely access to grant and expenditure data for relevant staff.
Assistance Listing, Federal Agency, and Program Name - 66.818, U.S. Environmental Protection Agency, Brownfields Assessment and Cleanup Cooperative Agreements; 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Federal Award Identification Number and Year - ALN 21.027 SLFRP0127 Pass through Entity - ALN 21.027 - State of Michigan Finding Type - Material weakness Repeat Finding - Yes 2023-002 Criteria - The Single Audit Act and Uniform Guidance require a nonfederal entity that expends $750,000 or more of federal awards in a fiscal year to have a single or program-specific audit. 2 CFR §200.508 (b) indicates that the auditee must prepare financial statements, including the schedule of expenditures of federal awards in accordance with 2 CFR §200.510. Additionally, 2 CFR §200.502 describes the basis for determining the timing of when federal awards are deemed expended and, therefore, reportable on the schedule. Condition - The schedule of expenditures of federal awards (SEFA) was not accurate. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - During the fiscal year ended September 30, 2024, the City expended approximately $2,831,000 of federal funding. The initial draft of the SEFA included the following inaccuracies: ALN 66.818 - The expenditures reported on the SEFA were understated by $148,474. ALN 21.027 - The expenditures reported on the SEFA were overstated by $2,078,221. The SEFA was also ovestated by $116,625 related to a non federal program. The errors noted above have been corrected on the SEFA as of September 30, 2024. Cause and Effect - Controls in place did not ensure the SEFA was complete and accurate for the fiscal period under audit. The errors resulted in the overstatement of federal expenditures. Recommendation - We recommend the City implement a process to ensure that the SEFA is complete and accurate. Views of Responsible Officials and Planned Corrective Actions - The City will review its process for identifying and communicating federal grant expenditures to its auditors.
Assistance Listing, Federal Agency, and Program Name - 66.818, U.S. Environmental Protection Agency, Brownfields Assessment and Cleanup Cooperative Agreements; 21.027, U.S. Department of the Treasury, COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Federal Award Identification Number and Year - ALN 21.027 SLFRP0127 Pass through Entity - ALN 21.027 - State of Michigan Finding Type - Material weakness Repeat Finding - Yes 2023-002 Criteria - The Single Audit Act and Uniform Guidance require a nonfederal entity that expends $750,000 or more of federal awards in a fiscal year to have a single or program-specific audit. 2 CFR §200.508 (b) indicates that the auditee must prepare financial statements, including the schedule of expenditures of federal awards in accordance with 2 CFR §200.510. Additionally, 2 CFR §200.502 describes the basis for determining the timing of when federal awards are deemed expended and, therefore, reportable on the schedule. Condition - The schedule of expenditures of federal awards (SEFA) was not accurate. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - During the fiscal year ended September 30, 2024, the City expended approximately $2,831,000 of federal funding. The initial draft of the SEFA included the following inaccuracies: ALN 66.818 - The expenditures reported on the SEFA were understated by $148,474. ALN 21.027 - The expenditures reported on the SEFA were overstated by $2,078,221. The SEFA was also ovestated by $116,625 related to a non federal program. The errors noted above have been corrected on the SEFA as of September 30, 2024. Cause and Effect - Controls in place did not ensure the SEFA was complete and accurate for the fiscal period under audit. The errors resulted in the overstatement of federal expenditures. Recommendation - We recommend the City implement a process to ensure that the SEFA is complete and accurate. Views of Responsible Officials and Planned Corrective Actions - The City will review its process for identifying and communicating federal grant expenditures to its auditors.
--Type of Finding: Material weakness in internal control over compliance --Criteria: The Uniform Guidance (2 CFR Part 200, subpart F) states it is the responsibility of the Organization’s management to ensure internal controls are properly designed and implemented in order to identify federal awards and expenditures of federal awards and to prepare a schedule of expenditures of federal awards (SEFA) that includes the total federal awards expended, as determined in accordance with § 200.502. --Condition and Context: While performing audit procedures, we identified two federal subawards that were not previously identified as such by management and had not been included on the SEFA for the year ended September 30, 2024 as originally presented for audit. The SEFA was subsequently corrected prior to issuance of the audit. The original SEFA was materially misstated due to the exclusion of expenditures under the federal subawards totaling $379,232. --Cause of Condition: Management failed to identify the agreements as federal subawards and the related expenditures for inclusion on the SEFA. --Effect of Condition: Failure to accurately identify all federal awards could cause the SEFA to be materially misstated and the performance of an insufficient major federal award programs audit. --Questioned Costs: None. --Repeat Finding: No. --Recommendation: We recommend the organization revisit its policies and procedures surrounding management’s review of grant and other contractual agreements to ensure all federal assistance, including subawards, are properly identified as such at the time the agreements are signed or received, and are properly included on the SEFA. --Views of Responsible Officials: See attached Corrective Action Plan.
--Type of Finding: Material weakness in internal control over compliance --Criteria: The Uniform Guidance (2 CFR Part 200, subpart F) states it is the responsibility of the Organization’s management to ensure internal controls are properly designed and implemented in order to identify federal awards and expenditures of federal awards and to prepare a schedule of expenditures of federal awards (SEFA) that includes the total federal awards expended, as determined in accordance with § 200.502. --Condition and Context: While performing audit procedures, we identified two federal subawards that were not previously identified as such by management and had not been included on the SEFA for the year ended September 30, 2024 as originally presented for audit. The SEFA was subsequently corrected prior to issuance of the audit. The original SEFA was materially misstated due to the exclusion of expenditures under the federal subawards totaling $379,232. --Cause of Condition: Management failed to identify the agreements as federal subawards and the related expenditures for inclusion on the SEFA. --Effect of Condition: Failure to accurately identify all federal awards could cause the SEFA to be materially misstated and the performance of an insufficient major federal award programs audit. --Questioned Costs: None. --Repeat Finding: No. --Recommendation: We recommend the organization revisit its policies and procedures surrounding management’s review of grant and other contractual agreements to ensure all federal assistance, including subawards, are properly identified as such at the time the agreements are signed or received, and are properly included on the SEFA. --Views of Responsible Officials: See attached Corrective Action Plan.
--Type of Finding: Material weakness in internal control over compliance --Criteria: The Uniform Guidance (2 CFR Part 200, subpart F) states it is the responsibility of the Organization’s management to ensure internal controls are properly designed and implemented in order to identify federal awards and expenditures of federal awards and to prepare a schedule of expenditures of federal awards (SEFA) that includes the total federal awards expended, as determined in accordance with § 200.502. --Condition and Context: While performing audit procedures, we identified two federal subawards that were not previously identified as such by management and had not been included on the SEFA for the year ended September 30, 2024 as originally presented for audit. The SEFA was subsequently corrected prior to issuance of the audit. The original SEFA was materially misstated due to the exclusion of expenditures under the federal subawards totaling $379,232. --Cause of Condition: Management failed to identify the agreements as federal subawards and the related expenditures for inclusion on the SEFA. --Effect of Condition: Failure to accurately identify all federal awards could cause the SEFA to be materially misstated and the performance of an insufficient major federal award programs audit. --Questioned Costs: None. --Repeat Finding: No. --Recommendation: We recommend the organization revisit its policies and procedures surrounding management’s review of grant and other contractual agreements to ensure all federal assistance, including subawards, are properly identified as such at the time the agreements are signed or received, and are properly included on the SEFA. --Views of Responsible Officials: See attached Corrective Action Plan.
--Type of Finding: Material weakness in internal control over compliance --Criteria: The Uniform Guidance (2 CFR Part 200, subpart F) states it is the responsibility of the Organization’s management to ensure internal controls are properly designed and implemented in order to identify federal awards and expenditures of federal awards and to prepare a schedule of expenditures of federal awards (SEFA) that includes the total federal awards expended, as determined in accordance with § 200.502. --Condition and Context: While performing audit procedures, we identified two federal subawards that were not previously identified as such by management and had not been included on the SEFA for the year ended September 30, 2024 as originally presented for audit. The SEFA was subsequently corrected prior to issuance of the audit. The original SEFA was materially misstated due to the exclusion of expenditures under the federal subawards totaling $379,232. --Cause of Condition: Management failed to identify the agreements as federal subawards and the related expenditures for inclusion on the SEFA. --Effect of Condition: Failure to accurately identify all federal awards could cause the SEFA to be materially misstated and the performance of an insufficient major federal award programs audit. --Questioned Costs: None. --Repeat Finding: No. --Recommendation: We recommend the organization revisit its policies and procedures surrounding management’s review of grant and other contractual agreements to ensure all federal assistance, including subawards, are properly identified as such at the time the agreements are signed or received, and are properly included on the SEFA. --Views of Responsible Officials: See attached Corrective Action Plan.
--Type of Finding: Material weakness in internal control over compliance --Criteria: The Uniform Guidance (2 CFR Part 200, subpart F) states it is the responsibility of the Organization’s management to ensure internal controls are properly designed and implemented in order to identify federal awards and expenditures of federal awards and to prepare a schedule of expenditures of federal awards (SEFA) that includes the total federal awards expended, as determined in accordance with § 200.502. --Condition and Context: While performing audit procedures, we identified two federal subawards that were not previously identified as such by management and had not been included on the SEFA for the year ended September 30, 2024 as originally presented for audit. The SEFA was subsequently corrected prior to issuance of the audit. The original SEFA was materially misstated due to the exclusion of expenditures under the federal subawards totaling $379,232. --Cause of Condition: Management failed to identify the agreements as federal subawards and the related expenditures for inclusion on the SEFA. --Effect of Condition: Failure to accurately identify all federal awards could cause the SEFA to be materially misstated and the performance of an insufficient major federal award programs audit. --Questioned Costs: None. --Repeat Finding: No. --Recommendation: We recommend the organization revisit its policies and procedures surrounding management’s review of grant and other contractual agreements to ensure all federal assistance, including subawards, are properly identified as such at the time the agreements are signed or received, and are properly included on the SEFA. --Views of Responsible Officials: See attached Corrective Action Plan.
Findings and Questioned Costs Relating to Federal Awards 2024 001 SEFA Control Deficiency U.S. Department of Treasury Community Development Financial Institutions Program (ALN 21.033) Statistically Valid Sample: No, and it was not intended to be. Prior Year Finding: Not a repeat finding. Finding Type: Significant deficiency Criteria CFR 200.502(a) requires expenditures be recorded in the period they occur. Additionally, 2 CFR 200.303(a) states that non federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition and Context During our test work over the Schedule of Expenditures of Federal Awards (SEFA), we noted the Organization incorrectly reported expenditures, in the amount of $693,023, incurred in the fiscal year ended September 30, 2023 on the 2024 SEFA. CFR 200.502(a) requires expenditures be recorded on the SEFA in the period they occur. The 2023 expenditures were incurred during the performance period of the grant and were for activities allowed under the grant, therefore there were no questioned costs or noncompliance related to the expenditures. The Organization’s internal controls were not designed to detect that the expenditures were not timely reported on the SEFA. Cause The significant deficiency arose primarily from a misunderstanding and misapplication of SEFA preparation rules in accordance with CFR 200.502(a), specifically regarding the timing of recording expenditures. Effect Failure to properly report expenditures on the SEFA can lead to a missed or incorrect major program determination. Questioned Costs None. Recommendation We recommend that the Organization strengthen its internal controls to ensure all expenditures are reported on the SEFA in the period incurred to comply with the requirements of CFR 200.502(a). Views of Responsible Officials As noted by our auditor, the submitted expenditures were allowable under the grant. The condition exists such that these expenditures were included within the current period SEFA report because that is when they were determined to be applicable, rather than the period when they were actually incurred (the prior period SEFA report). Going forward, management will ensure to report expenditures in the period they were incurred rather than the period they were applied.
2024-003 ─ Schedule of Expenditures of Federal Awards and State Financial Assistance (Schedule) U.S. Department of Transportation – Federal Transit Cluster (ALN No. 20.507) Federal award year 2023 Criteria: In accordance with 2 CFR 200.510(b), the auditee must prepare a Schedule of Expenditures of Federal Awards for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502. 2 CFR Section 200.502(a) states that the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. Generally, the activity pertains to events that require the non-federal entity to comply with federal statutes, regulations and the terms and conditions of federal awards, such as expenditure/expense transactions associated with grant awards. Condition: We noted that the Schedule of Expenditures of Federal Awards and State Financial Assistance (Schedule) provided to the auditors for the fiscal year ended September 30, 2024 included $56,503,870 of federal expenditures for the Federal Transit Cluster, assistance listing number 20.507, that should have been included in the Schedule for the fiscal year ended September 30, 2023. The County executed an ARPA transportation grant in September 2023 for which prior year eligible incurred costs were applied, however, these expenditures were not reported on the County’s Schedule until FY 2024. The Schedule for fiscal year ended September 30, 2023 was reissued to include the $56,503,870 and the expenditures were removed from the Schedule for the fiscal year ended September 30, 2024. Context: The finding is considered isolated in nature to the federal program in question. Effect: Improper reporting of federal expenditures resulted in a material error on the Schedule. Identification as a repeat finding, if applicable: Yes (2023-006) Cause: The department directly administering this grant did not realize they had to immediately recognize the expenditures associated with the grant at the time of grant award when the decision was made to apply prior eligible incurred costs. The transaction was not recorded until the reimbursement request was submitted in fiscal year 2024. Recommendation: Grant activities including general ledger activity should be reconciled by the departments managing the programs and the information communicated timely to the Office of Financial Management and Budget (OFMB). Depending on the nature and size of the grant programs these reconciliations could occur, monthly, quarterly or yearly, depending on what is most efficient in each individual situation. Also additional training could be provided to help enhance the understanding of grant personnel around some of the important nuances of revenue and expenditure recognition criteria the County must comply with in accordance with generally accepted accounting principles so they provide OFMB with sufficient information to prepare the end of year Schedule or so they can ask questions of OFMB and County Finance and seek assistance for any matters they are unsure of how to process.
2024-003 ─ Schedule of Expenditures of Federal Awards and State Financial Assistance (Schedule) U.S. Department of Transportation – Federal Transit Cluster (ALN No. 20.507) Federal award year 2023 Criteria: In accordance with 2 CFR 200.510(b), the auditee must prepare a Schedule of Expenditures of Federal Awards for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502. 2 CFR Section 200.502(a) states that the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. Generally, the activity pertains to events that require the non-federal entity to comply with federal statutes, regulations and the terms and conditions of federal awards, such as expenditure/expense transactions associated with grant awards. Condition: We noted that the Schedule of Expenditures of Federal Awards and State Financial Assistance (Schedule) provided to the auditors for the fiscal year ended September 30, 2024 included $56,503,870 of federal expenditures for the Federal Transit Cluster, assistance listing number 20.507, that should have been included in the Schedule for the fiscal year ended September 30, 2023. The County executed an ARPA transportation grant in September 2023 for which prior year eligible incurred costs were applied, however, these expenditures were not reported on the County’s Schedule until FY 2024. The Schedule for fiscal year ended September 30, 2023 was reissued to include the $56,503,870 and the expenditures were removed from the Schedule for the fiscal year ended September 30, 2024. Context: The finding is considered isolated in nature to the federal program in question. Effect: Improper reporting of federal expenditures resulted in a material error on the Schedule. Identification as a repeat finding, if applicable: Yes (2023-006) Cause: The department directly administering this grant did not realize they had to immediately recognize the expenditures associated with the grant at the time of grant award when the decision was made to apply prior eligible incurred costs. The transaction was not recorded until the reimbursement request was submitted in fiscal year 2024. Recommendation: Grant activities including general ledger activity should be reconciled by the departments managing the programs and the information communicated timely to the Office of Financial Management and Budget (OFMB). Depending on the nature and size of the grant programs these reconciliations could occur, monthly, quarterly or yearly, depending on what is most efficient in each individual situation. Also additional training could be provided to help enhance the understanding of grant personnel around some of the important nuances of revenue and expenditure recognition criteria the County must comply with in accordance with generally accepted accounting principles so they provide OFMB with sufficient information to prepare the end of year Schedule or so they can ask questions of OFMB and County Finance and seek assistance for any matters they are unsure of how to process.
2024-003 ─ Schedule of Expenditures of Federal Awards and State Financial Assistance (Schedule) U.S. Department of Transportation – Federal Transit Cluster (ALN No. 20.507) Federal award year 2023 Criteria: In accordance with 2 CFR 200.510(b), the auditee must prepare a Schedule of Expenditures of Federal Awards for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502. 2 CFR Section 200.502(a) states that the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. Generally, the activity pertains to events that require the non-federal entity to comply with federal statutes, regulations and the terms and conditions of federal awards, such as expenditure/expense transactions associated with grant awards. Condition: We noted that the Schedule of Expenditures of Federal Awards and State Financial Assistance (Schedule) provided to the auditors for the fiscal year ended September 30, 2024 included $56,503,870 of federal expenditures for the Federal Transit Cluster, assistance listing number 20.507, that should have been included in the Schedule for the fiscal year ended September 30, 2023. The County executed an ARPA transportation grant in September 2023 for which prior year eligible incurred costs were applied, however, these expenditures were not reported on the County’s Schedule until FY 2024. The Schedule for fiscal year ended September 30, 2023 was reissued to include the $56,503,870 and the expenditures were removed from the Schedule for the fiscal year ended September 30, 2024. Context: The finding is considered isolated in nature to the federal program in question. Effect: Improper reporting of federal expenditures resulted in a material error on the Schedule. Identification as a repeat finding, if applicable: Yes (2023-006) Cause: The department directly administering this grant did not realize they had to immediately recognize the expenditures associated with the grant at the time of grant award when the decision was made to apply prior eligible incurred costs. The transaction was not recorded until the reimbursement request was submitted in fiscal year 2024. Recommendation: Grant activities including general ledger activity should be reconciled by the departments managing the programs and the information communicated timely to the Office of Financial Management and Budget (OFMB). Depending on the nature and size of the grant programs these reconciliations could occur, monthly, quarterly or yearly, depending on what is most efficient in each individual situation. Also additional training could be provided to help enhance the understanding of grant personnel around some of the important nuances of revenue and expenditure recognition criteria the County must comply with in accordance with generally accepted accounting principles so they provide OFMB with sufficient information to prepare the end of year Schedule or so they can ask questions of OFMB and County Finance and seek assistance for any matters they are unsure of how to process.
2024-003 ─ Schedule of Expenditures of Federal Awards and State Financial Assistance (Schedule) U.S. Department of Transportation – Federal Transit Cluster (ALN No. 20.507) Federal award year 2023 Criteria: In accordance with 2 CFR 200.510(b), the auditee must prepare a Schedule of Expenditures of Federal Awards for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502. 2 CFR Section 200.502(a) states that the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. Generally, the activity pertains to events that require the non-federal entity to comply with federal statutes, regulations and the terms and conditions of federal awards, such as expenditure/expense transactions associated with grant awards. Condition: We noted that the Schedule of Expenditures of Federal Awards and State Financial Assistance (Schedule) provided to the auditors for the fiscal year ended September 30, 2024 included $56,503,870 of federal expenditures for the Federal Transit Cluster, assistance listing number 20.507, that should have been included in the Schedule for the fiscal year ended September 30, 2023. The County executed an ARPA transportation grant in September 2023 for which prior year eligible incurred costs were applied, however, these expenditures were not reported on the County’s Schedule until FY 2024. The Schedule for fiscal year ended September 30, 2023 was reissued to include the $56,503,870 and the expenditures were removed from the Schedule for the fiscal year ended September 30, 2024. Context: The finding is considered isolated in nature to the federal program in question. Effect: Improper reporting of federal expenditures resulted in a material error on the Schedule. Identification as a repeat finding, if applicable: Yes (2023-006) Cause: The department directly administering this grant did not realize they had to immediately recognize the expenditures associated with the grant at the time of grant award when the decision was made to apply prior eligible incurred costs. The transaction was not recorded until the reimbursement request was submitted in fiscal year 2024. Recommendation: Grant activities including general ledger activity should be reconciled by the departments managing the programs and the information communicated timely to the Office of Financial Management and Budget (OFMB). Depending on the nature and size of the grant programs these reconciliations could occur, monthly, quarterly or yearly, depending on what is most efficient in each individual situation. Also additional training could be provided to help enhance the understanding of grant personnel around some of the important nuances of revenue and expenditure recognition criteria the County must comply with in accordance with generally accepted accounting principles so they provide OFMB with sufficient information to prepare the end of year Schedule or so they can ask questions of OFMB and County Finance and seek assistance for any matters they are unsure of how to process.
2024-003 ─ Schedule of Expenditures of Federal Awards and State Financial Assistance (Schedule) U.S. Department of Transportation – Federal Transit Cluster (ALN No. 20.507) Federal award year 2023 Criteria: In accordance with 2 CFR 200.510(b), the auditee must prepare a Schedule of Expenditures of Federal Awards for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502. 2 CFR Section 200.502(a) states that the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. Generally, the activity pertains to events that require the non-federal entity to comply with federal statutes, regulations and the terms and conditions of federal awards, such as expenditure/expense transactions associated with grant awards. Condition: We noted that the Schedule of Expenditures of Federal Awards and State Financial Assistance (Schedule) provided to the auditors for the fiscal year ended September 30, 2024 included $56,503,870 of federal expenditures for the Federal Transit Cluster, assistance listing number 20.507, that should have been included in the Schedule for the fiscal year ended September 30, 2023. The County executed an ARPA transportation grant in September 2023 for which prior year eligible incurred costs were applied, however, these expenditures were not reported on the County’s Schedule until FY 2024. The Schedule for fiscal year ended September 30, 2023 was reissued to include the $56,503,870 and the expenditures were removed from the Schedule for the fiscal year ended September 30, 2024. Context: The finding is considered isolated in nature to the federal program in question. Effect: Improper reporting of federal expenditures resulted in a material error on the Schedule. Identification as a repeat finding, if applicable: Yes (2023-006) Cause: The department directly administering this grant did not realize they had to immediately recognize the expenditures associated with the grant at the time of grant award when the decision was made to apply prior eligible incurred costs. The transaction was not recorded until the reimbursement request was submitted in fiscal year 2024. Recommendation: Grant activities including general ledger activity should be reconciled by the departments managing the programs and the information communicated timely to the Office of Financial Management and Budget (OFMB). Depending on the nature and size of the grant programs these reconciliations could occur, monthly, quarterly or yearly, depending on what is most efficient in each individual situation. Also additional training could be provided to help enhance the understanding of grant personnel around some of the important nuances of revenue and expenditure recognition criteria the County must comply with in accordance with generally accepted accounting principles so they provide OFMB with sufficient information to prepare the end of year Schedule or so they can ask questions of OFMB and County Finance and seek assistance for any matters they are unsure of how to process.
2024-003 ─ Schedule of Expenditures of Federal Awards and State Financial Assistance (Schedule) U.S. Department of Transportation – Federal Transit Cluster (ALN No. 20.507) Federal award year 2023 Criteria: In accordance with 2 CFR 200.510(b), the auditee must prepare a Schedule of Expenditures of Federal Awards for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502. 2 CFR Section 200.502(a) states that the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. Generally, the activity pertains to events that require the non-federal entity to comply with federal statutes, regulations and the terms and conditions of federal awards, such as expenditure/expense transactions associated with grant awards. Condition: We noted that the Schedule of Expenditures of Federal Awards and State Financial Assistance (Schedule) provided to the auditors for the fiscal year ended September 30, 2024 included $56,503,870 of federal expenditures for the Federal Transit Cluster, assistance listing number 20.507, that should have been included in the Schedule for the fiscal year ended September 30, 2023. The County executed an ARPA transportation grant in September 2023 for which prior year eligible incurred costs were applied, however, these expenditures were not reported on the County’s Schedule until FY 2024. The Schedule for fiscal year ended September 30, 2023 was reissued to include the $56,503,870 and the expenditures were removed from the Schedule for the fiscal year ended September 30, 2024. Context: The finding is considered isolated in nature to the federal program in question. Effect: Improper reporting of federal expenditures resulted in a material error on the Schedule. Identification as a repeat finding, if applicable: Yes (2023-006) Cause: The department directly administering this grant did not realize they had to immediately recognize the expenditures associated with the grant at the time of grant award when the decision was made to apply prior eligible incurred costs. The transaction was not recorded until the reimbursement request was submitted in fiscal year 2024. Recommendation: Grant activities including general ledger activity should be reconciled by the departments managing the programs and the information communicated timely to the Office of Financial Management and Budget (OFMB). Depending on the nature and size of the grant programs these reconciliations could occur, monthly, quarterly or yearly, depending on what is most efficient in each individual situation. Also additional training could be provided to help enhance the understanding of grant personnel around some of the important nuances of revenue and expenditure recognition criteria the County must comply with in accordance with generally accepted accounting principles so they provide OFMB with sufficient information to prepare the end of year Schedule or so they can ask questions of OFMB and County Finance and seek assistance for any matters they are unsure of how to process.
2024-003 ─ Schedule of Expenditures of Federal Awards and State Financial Assistance (Schedule) U.S. Department of Transportation – Federal Transit Cluster (ALN No. 20.507) Federal award year 2023 Criteria: In accordance with 2 CFR 200.510(b), the auditee must prepare a Schedule of Expenditures of Federal Awards for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502. 2 CFR Section 200.502(a) states that the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. Generally, the activity pertains to events that require the non-federal entity to comply with federal statutes, regulations and the terms and conditions of federal awards, such as expenditure/expense transactions associated with grant awards. Condition: We noted that the Schedule of Expenditures of Federal Awards and State Financial Assistance (Schedule) provided to the auditors for the fiscal year ended September 30, 2024 included $56,503,870 of federal expenditures for the Federal Transit Cluster, assistance listing number 20.507, that should have been included in the Schedule for the fiscal year ended September 30, 2023. The County executed an ARPA transportation grant in September 2023 for which prior year eligible incurred costs were applied, however, these expenditures were not reported on the County’s Schedule until FY 2024. The Schedule for fiscal year ended September 30, 2023 was reissued to include the $56,503,870 and the expenditures were removed from the Schedule for the fiscal year ended September 30, 2024. Context: The finding is considered isolated in nature to the federal program in question. Effect: Improper reporting of federal expenditures resulted in a material error on the Schedule. Identification as a repeat finding, if applicable: Yes (2023-006) Cause: The department directly administering this grant did not realize they had to immediately recognize the expenditures associated with the grant at the time of grant award when the decision was made to apply prior eligible incurred costs. The transaction was not recorded until the reimbursement request was submitted in fiscal year 2024. Recommendation: Grant activities including general ledger activity should be reconciled by the departments managing the programs and the information communicated timely to the Office of Financial Management and Budget (OFMB). Depending on the nature and size of the grant programs these reconciliations could occur, monthly, quarterly or yearly, depending on what is most efficient in each individual situation. Also additional training could be provided to help enhance the understanding of grant personnel around some of the important nuances of revenue and expenditure recognition criteria the County must comply with in accordance with generally accepted accounting principles so they provide OFMB with sufficient information to prepare the end of year Schedule or so they can ask questions of OFMB and County Finance and seek assistance for any matters they are unsure of how to process.
2024-003: Preparation of Schedule of Expenditures of Federal Awards (SEFA) Finding Type: Material Weakness in Internal Controls and Noncompliance (Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Reporting) Federal Program: U.S. Department of Treasury – Local Assistance and Tribal Consistency Fund (AL #21.032) Criteria: The Code of Federal Regulations (CFR) Section 200.303(b) requires non-Federal entities to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and terms and conditions of the Federal award. CFR Section 200.502(a) states that the determination of when a Federal award is expended should be based on when the activity related to the Federal award occurs. Generally, the activity pertains to events that require the non-Federal entity to comply with Federal statutes, regulations, and the terms and conditions of Federal awards, such as expenditure/expense transactions associated with grant awards. The County reports expenditures on the SEFA when the expenditure has been incurred, or on the accrual basis of accounting, in accordance with generally accepted accounting principles. CFR Section 200.510(b) requires the auditee to prepare a SEFA for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with CFR Section 200.502(a), as stated above, and must reconcile amounts reported in the SEFA to the amounts reported in the auditee’s financial statements. Condition: The SEFA was not appropriately reconciled to federal grant revenues and expenditures recorded in the financial statements. Changes were made during the closing process and during the completion of the single audit to properly report expenditures on the SEFA. Closing procedures should be in place to reconcile grant expenditures incurred at year-end, confirm the amount as eligible with the grantor, claim the grant revenues on a timely basis, reconcile the claim to the general ledger, and ensure the expenditures that will be claimed under federal awards are properly reported on the SEFA and audited financial statements prior to the start of the single audit. If expenditures reported on the SEFA are misstated, the County could fail to have a program appropriately identified as a major program and tested as a major program during the single audit. Failure to have a program audited during the single audit would result in noncompliance with Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Cause: Closing procedures were not in place and management did not effectively communicate with County departments responsible for administering federal awards to identify all federal grant related activity. Effect: County personnel were unable to provide a complete SEFA in the appropriate format prior to the start of the annual financial statement audit and were uncertain if a single audit was required. The SEFA required material adjustments to include all federal expenditures prior to the beginning of the single audit. Questioned Costs: No costs have been questioned as a result of this finding. Recommendation: We recommend that management meet with department heads throughout the year and during the closing process to identify all expenditures under federal awards. Training should be provided to all staff to make sure they are aware of the importance of accurately reconciling and claiming grant expenditures on a timely basis and providing the information to management for inclusion on the SEFA. Views of Responsible Officials: The County will work to improve closing processes and communications with various departments to ensure the SEFA is complete and accurate.
Finding Number: 2024-030 Prior Year Finding Number: 2023-035 Compliance Requirement: Reporting Program: U.S. Department of Health and Human Services Opioid STR ALN: 93.788 Award #: Various Award Year: 09/30/2020 – 09/29/2024 Government Department/Agency: Department of Behavioral Health (DBH) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Federal Financial Report (FFR) Controls over Reporting Compliance: 2 CFR 200.333 requires that financial records, supporting documents, statistical records, and all other non-federal entity records pertinent to a federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the federal awarding agency or pass-through entity in the case of a subrecipient. Performance Progress Report (PPR) Underlying Data: The audit objective for the Reporting compliance requirement stated in the 2 CFR Part 200, appendix XI Compliance Supplement is as follows: Determine whether required reports for Federal awards include all activity of the reporting period, are supported by applicable accounting or performance records, and are fairly presented in accordance with governing requirements. Schedule of Expenditures of Federal Awards (SEFA) Reporting Compliance: Requirements, Cost Principles, and Audit Requirements, section 200.510(b) states the auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with 200.502. While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. Condition – During our testing of the reporting compliance requirement, we noted the following: • FFR Controls over Reporting Compliance: DBH’s control over compliance for financial reporting is as follows: “All reports are reviewed by the Accounting Officer or Agency Fiscal Officer prior to submission to the Federal government. DBH Program and Fiscal Services staff review programmatic and financial reports.” We noted DBH did not timely review and approve the annual Financial Reporting Report (FFR or SF-425) prior to submission to the Federal government. Total population is one (1) report and sample selected is one (1). • PPR Reporting Compliance: We noted DBH did not have documentation for the information, as well as the source of the information, it used in the Opioid STR’s Performance Progress Report. Information as reported in the reports was unsupported as management did not retain the underlying data. Total population is two (2) reports and sample selected is one (1). • SEFA Reporting Compliance: During our testing for the SEFA, we noted that DBH incorrectly reported the value of subrecipient expenditures included within the subrecipient expenditure column. For the year ended September 30, 2024, DBH incurred $12.0 million in subrecipient expenditures for this program and incorrectly reported that there were no subrecipient expenditures on the initial SEFA. While the subrecipient expenditures amount was not accurate, the total expenditures amount was accurately reported. The error in the subrecipient expenditures amount was subsequently identified and corrected as a result of the audit process. Questioned Costs – None. Context – This is a condition identified per review of DBH’s compliance with specified reporting requirements using a statistically valid sample. Effect – Without proper internal controls and policies and procedures in place to ensure that correct amounts were reported and were properly reviewed as it relates to the Opioid STR program: • FFR Controls over Reporting Compliance: There is an increased risk of errors occurring and being undetected, or errors being present in reports if no review and approval occurred. • PPR Reporting Compliance: DBH cannot be assured that it reported complete and accurate information to enable the Substance Abuse and Mental Health Services Administration (SAMHSA), an operating division of the Department of Health and Human Services (HHS), to assess the outcomes of the State’s use of Opioid program funding. • SEFA Reporting Compliance: The effect of the condition is that the SEFA was not accurately prepared. Cause – Management did not have proper internal controls and policies and procedures in place to ensure that the amounts on the FFR and SEFA were properly reported, and the reports were properly reviewed and approved. Recommendation – We recommend the following: • FFR Controls over Reporting Compliance: We recommend DBH strengthen its internal control to ensure timely review and approval of the FFR before report submission. • PPR Reporting Compliance: We recommend DBH develop formal, written procedures to identify the sources of information necessary and steps needed to compile accurate and complete information for the Opioid program performance reports; and retain in a central location all documentation that it used to support information included in each performance report it submits to the federal government. • SEFA Reporting Compliance: We recommend DBH ensure that agency personnel receive proper training on subrecipient versus vendor determination; as well as review existing policies and procedures for preparing the Schedule of Expenditures of Federal Awards to ensure that it is complete and accurate. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – The DBH Office of the Chief Financial Officer (OCFO) concurs with this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.
2024-002 [2022‐002]—PREPARATION OF SCHEDULE OF EXPENDITURES OF FEDERAL AWARDSFederal Agency: All presented in the Schedule of Expenditures of Federal Awards. Program Name: All presented in the Schedule of Expenditures of Federal Awards. Assistance Listing Nos. and Program Expenditures: All presented in Schedule of Expenditures of Federal Awards. Award Number and Program Award Year: All awards presented in Schedule of Expenditures of Federal Awards. Compliance Requirement: Other – Schedule of Expenditures of Federal Awards preparation Type of Finding: (F) Significant Deficiency in Internal Control over Compliance of Federal Awards. Questioned Costs: None Statement of Condition During our audit, we reviewed the Coalition’s federal-grants report for the fiscal year and identified the grants, Assistance-Listing numbers (AL #s), expenditure amounts, and all other items required to properly present the Schedule of Expenditures of Federal Awards (SEFA). Finance staff subsequently confirmed the SEFA; however, additional federal expenditures and mis-grouped grant costs were found during later reviews. Criteria2 CFR 200.510 indicates that the auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502, Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. Generally, the activity pertains to events that require the non-federal entity to comply with federal statutes, regulations, and the terms and conditions of federal awards, such as expenditure/expense transactions associated with awards. In addition, 2 CFR Part 200.303 requires the program to establish and maintain effective internal controls over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Effect Without an established process governed by effective internal controls, the Coalition may not prevent or detect material misstatements on its SEFA in a timely manner. In addition, errors in SEFA preparation could affect the major federal program determination and lead to noncompliance with 2 CFR 200 Subpart F, which in turn could result in a substandard single audit. Cause Historically, the Coalition has requested the auditor assist in identifying accruals related to federal grant expenditures as the organization has maintained these records on a cash basis. As the organization has taken more responsibility on maintaining its federal grant expenditures on an accrual basis, an incomplete SEFA has been provided. Recommendation We recommend the Coalition prepare the Schedule of Expenditures of Federal Awards and submit this to the auditor for testing. The SEFA should include the name of the grant, name of grantor, the AL #, the pass-through number if applicable and a reconciliation of the federal revenues and expenditures to the Coalition’s general ledger. The Coalition staff should perform more detailed reviews of the reports to ensure they properly reflect grant receipts and expenditures. This review should be performed by someone other than the preparer and should include documented evidence of agreeing the reported data to the accounting records. We further recommend training for those individuals involved in the preparation and review of the reports to ensure they are fully aware of the requirements. View of Responsible Officials and Corrective Action Plan: The corrective Action Plan will be carried out in the 2025 Fiscal Year and information will be given to the auditors when requested for the next audit. The Coalition will ensure that all information needed for the SEFA is kept and entered accurately (this process has already begun). When the fiscal year closes out, the Coalition will provide the auditors with a test SEFA to confirm that the information we are collecting throughout the year and are asserting are the correct numbers for our federal grants, is indeed the correct information. Corrective Action Plan Timeline: Completed by December 19, 2025 (Final copy of the SEFA will not be given to the auditors until requested for the Audit).Designation Of Employee Position Responsible For Meeting Deadline: Executive Director will oversee this project and work directly with NMCEH finance staff work closely with the auditors to make sure that the information saved and shared is correct.
2024-002 [2022‐002]—PREPARATION OF SCHEDULE OF EXPENDITURES OF FEDERAL AWARDSFederal Agency: All presented in the Schedule of Expenditures of Federal Awards. Program Name: All presented in the Schedule of Expenditures of Federal Awards. Assistance Listing Nos. and Program Expenditures: All presented in Schedule of Expenditures of Federal Awards. Award Number and Program Award Year: All awards presented in Schedule of Expenditures of Federal Awards. Compliance Requirement: Other – Schedule of Expenditures of Federal Awards preparation Type of Finding: (F) Significant Deficiency in Internal Control over Compliance of Federal Awards. Questioned Costs: None Statement of Condition During our audit, we reviewed the Coalition’s federal-grants report for the fiscal year and identified the grants, Assistance-Listing numbers (AL #s), expenditure amounts, and all other items required to properly present the Schedule of Expenditures of Federal Awards (SEFA). Finance staff subsequently confirmed the SEFA; however, additional federal expenditures and mis-grouped grant costs were found during later reviews. Criteria2 CFR 200.510 indicates that the auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502, Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. Generally, the activity pertains to events that require the non-federal entity to comply with federal statutes, regulations, and the terms and conditions of federal awards, such as expenditure/expense transactions associated with awards. In addition, 2 CFR Part 200.303 requires the program to establish and maintain effective internal controls over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Effect Without an established process governed by effective internal controls, the Coalition may not prevent or detect material misstatements on its SEFA in a timely manner. In addition, errors in SEFA preparation could affect the major federal program determination and lead to noncompliance with 2 CFR 200 Subpart F, which in turn could result in a substandard single audit. Cause Historically, the Coalition has requested the auditor assist in identifying accruals related to federal grant expenditures as the organization has maintained these records on a cash basis. As the organization has taken more responsibility on maintaining its federal grant expenditures on an accrual basis, an incomplete SEFA has been provided. Recommendation We recommend the Coalition prepare the Schedule of Expenditures of Federal Awards and submit this to the auditor for testing. The SEFA should include the name of the grant, name of grantor, the AL #, the pass-through number if applicable and a reconciliation of the federal revenues and expenditures to the Coalition’s general ledger. The Coalition staff should perform more detailed reviews of the reports to ensure they properly reflect grant receipts and expenditures. This review should be performed by someone other than the preparer and should include documented evidence of agreeing the reported data to the accounting records. We further recommend training for those individuals involved in the preparation and review of the reports to ensure they are fully aware of the requirements. View of Responsible Officials and Corrective Action Plan: The corrective Action Plan will be carried out in the 2025 Fiscal Year and information will be given to the auditors when requested for the next audit. The Coalition will ensure that all information needed for the SEFA is kept and entered accurately (this process has already begun). When the fiscal year closes out, the Coalition will provide the auditors with a test SEFA to confirm that the information we are collecting throughout the year and are asserting are the correct numbers for our federal grants, is indeed the correct information. Corrective Action Plan Timeline: Completed by December 19, 2025 (Final copy of the SEFA will not be given to the auditors until requested for the Audit).Designation Of Employee Position Responsible For Meeting Deadline: Executive Director will oversee this project and work directly with NMCEH finance staff work closely with the auditors to make sure that the information saved and shared is correct.
2024-002 [2022‐002]—PREPARATION OF SCHEDULE OF EXPENDITURES OF FEDERAL AWARDSFederal Agency: All presented in the Schedule of Expenditures of Federal Awards. Program Name: All presented in the Schedule of Expenditures of Federal Awards. Assistance Listing Nos. and Program Expenditures: All presented in Schedule of Expenditures of Federal Awards. Award Number and Program Award Year: All awards presented in Schedule of Expenditures of Federal Awards. Compliance Requirement: Other – Schedule of Expenditures of Federal Awards preparation Type of Finding: (F) Significant Deficiency in Internal Control over Compliance of Federal Awards. Questioned Costs: None Statement of Condition During our audit, we reviewed the Coalition’s federal-grants report for the fiscal year and identified the grants, Assistance-Listing numbers (AL #s), expenditure amounts, and all other items required to properly present the Schedule of Expenditures of Federal Awards (SEFA). Finance staff subsequently confirmed the SEFA; however, additional federal expenditures and mis-grouped grant costs were found during later reviews. Criteria2 CFR 200.510 indicates that the auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502, Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. Generally, the activity pertains to events that require the non-federal entity to comply with federal statutes, regulations, and the terms and conditions of federal awards, such as expenditure/expense transactions associated with awards. In addition, 2 CFR Part 200.303 requires the program to establish and maintain effective internal controls over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Effect Without an established process governed by effective internal controls, the Coalition may not prevent or detect material misstatements on its SEFA in a timely manner. In addition, errors in SEFA preparation could affect the major federal program determination and lead to noncompliance with 2 CFR 200 Subpart F, which in turn could result in a substandard single audit. Cause Historically, the Coalition has requested the auditor assist in identifying accruals related to federal grant expenditures as the organization has maintained these records on a cash basis. As the organization has taken more responsibility on maintaining its federal grant expenditures on an accrual basis, an incomplete SEFA has been provided. Recommendation We recommend the Coalition prepare the Schedule of Expenditures of Federal Awards and submit this to the auditor for testing. The SEFA should include the name of the grant, name of grantor, the AL #, the pass-through number if applicable and a reconciliation of the federal revenues and expenditures to the Coalition’s general ledger. The Coalition staff should perform more detailed reviews of the reports to ensure they properly reflect grant receipts and expenditures. This review should be performed by someone other than the preparer and should include documented evidence of agreeing the reported data to the accounting records. We further recommend training for those individuals involved in the preparation and review of the reports to ensure they are fully aware of the requirements. View of Responsible Officials and Corrective Action Plan: The corrective Action Plan will be carried out in the 2025 Fiscal Year and information will be given to the auditors when requested for the next audit. The Coalition will ensure that all information needed for the SEFA is kept and entered accurately (this process has already begun). When the fiscal year closes out, the Coalition will provide the auditors with a test SEFA to confirm that the information we are collecting throughout the year and are asserting are the correct numbers for our federal grants, is indeed the correct information. Corrective Action Plan Timeline: Completed by December 19, 2025 (Final copy of the SEFA will not be given to the auditors until requested for the Audit).Designation Of Employee Position Responsible For Meeting Deadline: Executive Director will oversee this project and work directly with NMCEH finance staff work closely with the auditors to make sure that the information saved and shared is correct.
2024-002 [2022‐002]—PREPARATION OF SCHEDULE OF EXPENDITURES OF FEDERAL AWARDSFederal Agency: All presented in the Schedule of Expenditures of Federal Awards. Program Name: All presented in the Schedule of Expenditures of Federal Awards. Assistance Listing Nos. and Program Expenditures: All presented in Schedule of Expenditures of Federal Awards. Award Number and Program Award Year: All awards presented in Schedule of Expenditures of Federal Awards. Compliance Requirement: Other – Schedule of Expenditures of Federal Awards preparation Type of Finding: (F) Significant Deficiency in Internal Control over Compliance of Federal Awards. Questioned Costs: None Statement of Condition During our audit, we reviewed the Coalition’s federal-grants report for the fiscal year and identified the grants, Assistance-Listing numbers (AL #s), expenditure amounts, and all other items required to properly present the Schedule of Expenditures of Federal Awards (SEFA). Finance staff subsequently confirmed the SEFA; however, additional federal expenditures and mis-grouped grant costs were found during later reviews. Criteria2 CFR 200.510 indicates that the auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502, Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. Generally, the activity pertains to events that require the non-federal entity to comply with federal statutes, regulations, and the terms and conditions of federal awards, such as expenditure/expense transactions associated with awards. In addition, 2 CFR Part 200.303 requires the program to establish and maintain effective internal controls over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Effect Without an established process governed by effective internal controls, the Coalition may not prevent or detect material misstatements on its SEFA in a timely manner. In addition, errors in SEFA preparation could affect the major federal program determination and lead to noncompliance with 2 CFR 200 Subpart F, which in turn could result in a substandard single audit. Cause Historically, the Coalition has requested the auditor assist in identifying accruals related to federal grant expenditures as the organization has maintained these records on a cash basis. As the organization has taken more responsibility on maintaining its federal grant expenditures on an accrual basis, an incomplete SEFA has been provided. Recommendation We recommend the Coalition prepare the Schedule of Expenditures of Federal Awards and submit this to the auditor for testing. The SEFA should include the name of the grant, name of grantor, the AL #, the pass-through number if applicable and a reconciliation of the federal revenues and expenditures to the Coalition’s general ledger. The Coalition staff should perform more detailed reviews of the reports to ensure they properly reflect grant receipts and expenditures. This review should be performed by someone other than the preparer and should include documented evidence of agreeing the reported data to the accounting records. We further recommend training for those individuals involved in the preparation and review of the reports to ensure they are fully aware of the requirements. View of Responsible Officials and Corrective Action Plan: The corrective Action Plan will be carried out in the 2025 Fiscal Year and information will be given to the auditors when requested for the next audit. The Coalition will ensure that all information needed for the SEFA is kept and entered accurately (this process has already begun). When the fiscal year closes out, the Coalition will provide the auditors with a test SEFA to confirm that the information we are collecting throughout the year and are asserting are the correct numbers for our federal grants, is indeed the correct information. Corrective Action Plan Timeline: Completed by December 19, 2025 (Final copy of the SEFA will not be given to the auditors until requested for the Audit).Designation Of Employee Position Responsible For Meeting Deadline: Executive Director will oversee this project and work directly with NMCEH finance staff work closely with the auditors to make sure that the information saved and shared is correct.
2024-002 [2022‐002]—PREPARATION OF SCHEDULE OF EXPENDITURES OF FEDERAL AWARDSFederal Agency: All presented in the Schedule of Expenditures of Federal Awards. Program Name: All presented in the Schedule of Expenditures of Federal Awards. Assistance Listing Nos. and Program Expenditures: All presented in Schedule of Expenditures of Federal Awards. Award Number and Program Award Year: All awards presented in Schedule of Expenditures of Federal Awards. Compliance Requirement: Other – Schedule of Expenditures of Federal Awards preparation Type of Finding: (F) Significant Deficiency in Internal Control over Compliance of Federal Awards. Questioned Costs: None Statement of Condition During our audit, we reviewed the Coalition’s federal-grants report for the fiscal year and identified the grants, Assistance-Listing numbers (AL #s), expenditure amounts, and all other items required to properly present the Schedule of Expenditures of Federal Awards (SEFA). Finance staff subsequently confirmed the SEFA; however, additional federal expenditures and mis-grouped grant costs were found during later reviews. Criteria2 CFR 200.510 indicates that the auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502, Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. Generally, the activity pertains to events that require the non-federal entity to comply with federal statutes, regulations, and the terms and conditions of federal awards, such as expenditure/expense transactions associated with awards. In addition, 2 CFR Part 200.303 requires the program to establish and maintain effective internal controls over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Effect Without an established process governed by effective internal controls, the Coalition may not prevent or detect material misstatements on its SEFA in a timely manner. In addition, errors in SEFA preparation could affect the major federal program determination and lead to noncompliance with 2 CFR 200 Subpart F, which in turn could result in a substandard single audit. Cause Historically, the Coalition has requested the auditor assist in identifying accruals related to federal grant expenditures as the organization has maintained these records on a cash basis. As the organization has taken more responsibility on maintaining its federal grant expenditures on an accrual basis, an incomplete SEFA has been provided. Recommendation We recommend the Coalition prepare the Schedule of Expenditures of Federal Awards and submit this to the auditor for testing. The SEFA should include the name of the grant, name of grantor, the AL #, the pass-through number if applicable and a reconciliation of the federal revenues and expenditures to the Coalition’s general ledger. The Coalition staff should perform more detailed reviews of the reports to ensure they properly reflect grant receipts and expenditures. This review should be performed by someone other than the preparer and should include documented evidence of agreeing the reported data to the accounting records. We further recommend training for those individuals involved in the preparation and review of the reports to ensure they are fully aware of the requirements. View of Responsible Officials and Corrective Action Plan: The corrective Action Plan will be carried out in the 2025 Fiscal Year and information will be given to the auditors when requested for the next audit. The Coalition will ensure that all information needed for the SEFA is kept and entered accurately (this process has already begun). When the fiscal year closes out, the Coalition will provide the auditors with a test SEFA to confirm that the information we are collecting throughout the year and are asserting are the correct numbers for our federal grants, is indeed the correct information. Corrective Action Plan Timeline: Completed by December 19, 2025 (Final copy of the SEFA will not be given to the auditors until requested for the Audit).Designation Of Employee Position Responsible For Meeting Deadline: Executive Director will oversee this project and work directly with NMCEH finance staff work closely with the auditors to make sure that the information saved and shared is correct.
2024-002 [2022‐002]—PREPARATION OF SCHEDULE OF EXPENDITURES OF FEDERAL AWARDSFederal Agency: All presented in the Schedule of Expenditures of Federal Awards. Program Name: All presented in the Schedule of Expenditures of Federal Awards. Assistance Listing Nos. and Program Expenditures: All presented in Schedule of Expenditures of Federal Awards. Award Number and Program Award Year: All awards presented in Schedule of Expenditures of Federal Awards. Compliance Requirement: Other – Schedule of Expenditures of Federal Awards preparation Type of Finding: (F) Significant Deficiency in Internal Control over Compliance of Federal Awards. Questioned Costs: None Statement of Condition During our audit, we reviewed the Coalition’s federal-grants report for the fiscal year and identified the grants, Assistance-Listing numbers (AL #s), expenditure amounts, and all other items required to properly present the Schedule of Expenditures of Federal Awards (SEFA). Finance staff subsequently confirmed the SEFA; however, additional federal expenditures and mis-grouped grant costs were found during later reviews. Criteria2 CFR 200.510 indicates that the auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502, Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. Generally, the activity pertains to events that require the non-federal entity to comply with federal statutes, regulations, and the terms and conditions of federal awards, such as expenditure/expense transactions associated with awards. In addition, 2 CFR Part 200.303 requires the program to establish and maintain effective internal controls over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Effect Without an established process governed by effective internal controls, the Coalition may not prevent or detect material misstatements on its SEFA in a timely manner. In addition, errors in SEFA preparation could affect the major federal program determination and lead to noncompliance with 2 CFR 200 Subpart F, which in turn could result in a substandard single audit. Cause Historically, the Coalition has requested the auditor assist in identifying accruals related to federal grant expenditures as the organization has maintained these records on a cash basis. As the organization has taken more responsibility on maintaining its federal grant expenditures on an accrual basis, an incomplete SEFA has been provided. Recommendation We recommend the Coalition prepare the Schedule of Expenditures of Federal Awards and submit this to the auditor for testing. The SEFA should include the name of the grant, name of grantor, the AL #, the pass-through number if applicable and a reconciliation of the federal revenues and expenditures to the Coalition’s general ledger. The Coalition staff should perform more detailed reviews of the reports to ensure they properly reflect grant receipts and expenditures. This review should be performed by someone other than the preparer and should include documented evidence of agreeing the reported data to the accounting records. We further recommend training for those individuals involved in the preparation and review of the reports to ensure they are fully aware of the requirements. View of Responsible Officials and Corrective Action Plan: The corrective Action Plan will be carried out in the 2025 Fiscal Year and information will be given to the auditors when requested for the next audit. The Coalition will ensure that all information needed for the SEFA is kept and entered accurately (this process has already begun). When the fiscal year closes out, the Coalition will provide the auditors with a test SEFA to confirm that the information we are collecting throughout the year and are asserting are the correct numbers for our federal grants, is indeed the correct information. Corrective Action Plan Timeline: Completed by December 19, 2025 (Final copy of the SEFA will not be given to the auditors until requested for the Audit).Designation Of Employee Position Responsible For Meeting Deadline: Executive Director will oversee this project and work directly with NMCEH finance staff work closely with the auditors to make sure that the information saved and shared is correct.